The Naira crashed to a fresh all-time low level of N478 to the dollar in the parallel market on Thursday, from about N472 exchange rate attained on Wednesday.
The crash was as low as N480 in some sections of the market, the largest since the introduction of the floating foreign exchange policy by the Central Bank of Nigeria (CBN) last June.
The flexible policy adopted by the back removed the N197-N199 to the dollar foreign exchange band, allowing value of the national currency to the pull of market forces of demand and supply.
Also, on the interbank FX market, the local currency closed flat at 312.99 against the dollar on Wednesday, according to data from FMDQ OTC Securities Exchange.
But, the official rate stood at about N305.5 to the dollar on Thursday, with Pound Sterling attracting N398, and Euro N341.
Analysts said the massive plummeting of the Naira was as a result of the anticipated return of transfer of dollars abroad by Travelex through the bureau de change (BDCs) on Friday.
The arrangement, introduced by the CBN August last year, to facilitate the transfer of money outside the country for payment of students school fees, has faced serious hiccups with acute shortage of dollar.
“As we speak, no bank is dispensing dollars to the BDCs for that purpose. The BDCs’ accounts were debited by some banks since Monday and they are not able to pay any of the BDCs so far debited. This is really sending a bad signal in the market,” one BDC operator said.
The operator requested his name be left out of the report, as he did not have the permission to speak on the issue.
Supply of dollar has remained a huge problem in the foreign exchange market, as more Nigerians, especially manufacturers and parents, continue to press for more supplies to assist importation of raw materials and payment of school fees in foreign schools.
The CBN governor, Godwin Emefiele, said during the last Monetary Policy Commuter (MPC) meeting that the bank was doing everything possible to resolve the crisis.
He however said it was unfair to allow the exchange rate of the Naira to be dictated by the illegal activities of the parallel market, which accounts for less than five per cent of the entire FOREX market.